Yahoo Finance 500 jobs could go at British Steel if Chinese group buys firm, unions warn
Up to 500 jobs could be at risk at British Steel if regulators approve a takeover of the company by China’s Jingye, unions have warned.
In November, Jingye agreed to pay around £50m ($65.4m) to take over British Steel, but workers have been fearful about the impact of the deal on their jobs.
Though unions have backed the deal in the belief that it will secure British Steel’s future, they have warned that around 10% of the company’s workforce could lose their jobs.
“With British Steel in liquidation it is clear that if the business is to survive change is required,” the unions Community, Unite, and GMB said in a joint statement.
They noted, however, that they could not endorse job cuts.
READ MORE: PMI boost ‘kills off’ chances of Bank slashing rates
Jingye has said it will spend £1.2bn turning the company around, and on Thursday it agreed with unions that new employment contracts would not “disproportionately affect employees differently.”
Because British Steel has a plant in northern France, the deal needs approval from French regulators. But a decision is not expected for more than a month.
British Steel employs around 5,000 people. Its main plant is in Scunthorpe and Teesside, where it employs an estimated 4,000 people.
Thousands of other jobs are reliant on the British Steel supply chain.
READ MORE: UK firms demand a say over immigration reforms
The unions said they believed British Steel would be broken up and sold into parts if the sale does not go ahead.
British Steel was forced into compulsory liquidation in May. The Turkish army’s pension fund Oyak reached a provisional deal to acquire the company in August, but a deadline for exclusive talks came and went without agreement.
Since May, the company has been overseen by the Official Receiver, a court-appointed civil servant.
The collapse of British Steel came after a troubled few years for the UK firm, which is thought to produce around a third of the steel made in the country.
High energy costs, fierce Chinese competition, global overproduction, and a lack of investment and state support have all been blamed for the challenges facing the company and its competitors in the UK.
